Just one day after he was forced to leave the forlorn Internet company for padding his resume, reports surfaced that ex-Yahoo CEO Scott Thompson revealed he has cancer.

According to a report in TheWall Street Journal, citing unnamed sources, Thompson told Yahoo's board and several colleagues of his thyroid cancer before resigning Sunday.
A source told TheJournal that Thompson's decision to leave his position at Yahoo was in part influenced by his cancer diagnosis.

News broke last week that Thompson embellished his resume with a degree in computer science, when he actually earned a degree in accounting from a small Massachusetts college.

Thompson was hired in January to replace Carol Bartz, who was fired by phone last September.

In the revolving position at Yahoo, former head of global media Ross Levinsohn has been named interim CEO.

Yahoo investors applauded the media veteran's appointment. Yahoo shares tacked on 2.2% in premarket trading Monday ahead of a nasty open for U.S. markets.

Levinsohn has significant credentials as a negotiator. Before coming aboard at Yahoo, he had a history of recognizing and acquiring an assortment of digital media companies around the globe. That is a striking comparison to Yahoo's last two CEOs, who had stronger backgrounds in technology than media.

"We view Mr. Levinsohn as well-equipped to lead the organization and to build off the company's core strengths – advertising products and digital media," said Spencer Wang, an analyst with Credit Suisse.

But Yahoo still faces a rocky road ahead.

Yahoo Needs New Focus

Macquarie analyst Ben Schachter penned in a research note, "As a practical matter, what this means for the company is that the past four months have been little more than a false start, and it must once again start at the beginning in terms of establishing a strategic direction."

Schachter describes Yahoo as a mess. He said the management changes were necessary following the debacle over Thompson's resume, and supposes that Levinsohn may "be auditioning to take on this role on a permanent basis."

One area Levinsohn will need to address immediately is the company's ability to innovate.

"They've failed to keep up with the evolution of the internet. What they'd most benefit from is someone with a bit more vision that could capitalize on their brand and focus more resources on higher growth areas," said Clayton Moran, an analyst for The Benchmark Company.

Yahoo, once a pioneer, now struggles to revive growth, revitalize its popularity with consumers and reclaim its status as a storied Internet company and brand.

But it takes time for a new leader to redirect the company – time Yahoo might not have.

Benchmark's Moran sees Levinsohn as a candidate for permanent leadership, but cautioned that it is far from certain when Yahoo would decide on its leader or how long it would take for the new chief executive to construct a fresh strategy.

"We could be in a period of limbo again," said Moran. "Once somebody has solidified that position we may have to wait 90 days for them to complete their review."

Yahoo (Nasdaq: YHOO) Hurt By Shareholder Activism

Thompson's resignation is a win for Daniel Loeb, activist hedge fund manager of Third Point LLC, Yahoo's largest outside shareholder, which owns 5.8% of the company. It was Loeb who uncovered Thompson's overstated background and fought for his ouster.

AllThingsD, which wrote about Thompson's exit early on Sunday, noted Yahoo's board is working on a deal that would give Loeb's Third Point three seats on the company's board.

Tech entrepreneur Mark Cuban, who has directly followed Yahoo's twists and turns since selling his Broadcast.com to the company in 1999 for more than $5 billion, said shareholders should give Yahoo room to find its way.

"I don't think shareholder activism helps Yahoo. It puts too much pressure on increasing the stock price. That is the least important of their worries. They have to change the culture and find their leverage points to grow the business," Cuban said.

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